Consolidated Capital and Funding Pty Ltd v Jakk Holdings Pty Ltd

Consolidated Capital and Funding Pty Ltd, the Plaintiff, brought an action against six defendants, including Jakk Holdings Pty Ltd, the Second Defendant, alleging breaches of fiduciary duty by the Third Defendant in favour of the Second Defendant. The Plaintiff sought to hold the Second Defendant liable for the Third Defendant's actions, claiming the Second Defendant procured the breaches. The Second Defendant applied to have the claims against her struck out, arguing they were groundless and without reasonable cause.

The central legal issue was whether the Plaintiff's claim against the Second Defendant was so obviously untenable or groundless that it would fail if the matter proceeded to trial. The court considered the allegations in the Plaintiff's Amended Statement of Claim and the inferences upon which the Plaintiff relied to establish the Second Defendant's involvement in the Third Defendant's breaches of fiduciary duty. The Second Defendant contended that the Plaintiff's case against her was speculative and lacked sufficient factual basis to warrant a trial.

The court held that the Plaintiff's claim was not so obviously untenable or groundless as to warrant a striking out. The allegations, while needing substantiation, did not meet the threshold required for a dismissal under the relevant civil procedure rules. The court found that the Plaintiff's case, while speculative, was not devoid of a reasonable cause of action. The Second Defendant's application to strike out the claims against her was dismissed, allowing the matter to proceed to trial.